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The Virtual AMEA CXO Round Table May 2020: Re-imagining Business with Digital, People & Mindset Change

May 27, 2020
Chandrasekhar Pingali

An exclusive group of 13 CXOs from across 10 countries and 5 industries met at a virtual round table over two sessions to discuss better practices during COVID and a re-imagined future.

The scope of the discussion

In the current state we are preparing to enter into the unknown so preparing for the unthinkable becomes critical. Research based on previous crisis shows that organizations that were prepared to deal with many different types of scenarios were the ones that survived. So being prepared and not assuming that things will somehow work out is key.

The top of the mind issues identified were broadly categorized into two topics :
  • Re-imagining business with digital
  • People and mindset change

A McKinsey report on change in customer behavior and needs over the month of April shows
  • Digital engagement levels have climbed 20%
  • Use of cash has halved
  • 30-40% of customers have expressed greater need for advice
  • 20-30% want products to help them through the crisis

Clearly indicating that things have changed rapidly since this crisis started.

On re-imagining what, and how digital technologies will be used in the future.

The discussion in the group on reimagining use of digital technology can be broadly categorized in relation to:

  1. The magnitude of benefit or advantage.
  2. Experience wherein the customer is an empowered participant.

Large case studies mentioned were the use of a Digital Demand Generation approach in the US to craft new customer journeys enabled with AI and robotic process automation and a Bank project in Asia that would completely eliminate all local correspondents and merchant points and move the entire experience to a contact free, friction free environment.

While the current pandemic may have accelerated the process of digital adoption it has also made enterprises push the boundaries of their imagination, think very hard, design very heavily, choose very deliberately to find things that will truly stand out and make a massive impact, before embarking on a digitally transformative journey. Organizations are getting deeper into methodologies like Design Thinking to go beyond the unthinkable to create experiences that are participative and customer empowering in industries ranging from entertainment, gaming, and even in those as standard as digital payments. There is also a great deal of serious deliberation across user levels on what constitutes that individualized personal experience; what issues can emerge from the use of technologies like the industrial internet of things, predictive and prescriptive analysis, augmented technologies, and how to mitigate it.

Full advantage of digital can be captured when technologies re-engineer business processes, culture, skills and stakeholder journeys. Design thinking emerged as a “must do” for all participants to enable this reengineering.

At a lower level of magnitude of benefit or advantage is the digital automation and robotizing in conventional industrial/service entertainment sectors like:

  • Using virtual to attend to day to day activities to produce a near life like situations
  • Digital twinning for sports and entertainment
  • More of knitting together available digital technologies to accomplish conventional manufacturing and engineering tasks though remote supervision and expert intervention Conventional manufacturing supervision tasks accomplished remotely
  • Application of ML and AI to robotize tasks on the shop floor of heavy manufacturing industry
  • Increased use of digital tech to integrate ML, AI and robot tech integrated into service sector. This is driven by customer needs but enterprises taking it to a higher level for create greater customer satisfaction.

Some digital adoption has risen out of necessity in response to the current crisis but is now being converted into an opportunity to institutionalize and profit from the efficiencies that can be obtained and therefore will stay.

Digital technology can and should be used to create immersive, individually personalized experiences.

People are also beginning to realize that the way to gain real competitive advantage is to truly master digital; to go beyond classic dashboards into the realm of technologies like the industrial internet of things, predictive and prescriptive analysis, and augmented technologies. Companies with the resilience, muscle and visionary leadership will be able to see this process through, but those with more pressing day to day management and cash flow concerns will have a hard time staying the course. Eventually, the winners in every industry would have embraced digital reengineering and there is no time like a crisis to start on the journey.

On the trend in Vietnam

Considering the size of the market Vietnam has always had good technology access so, COVID has not really affected or changed digital usage drastically. 
The trend in the financial services sector appears to take a more collaborative approach to business – eg. Covering both credit sales origination, transaction, and collections on the same platform, or the ability to complete a transaction at the point of consumption using simple apps or chat applications.
As a result of the move towards greater digitalization the two emerging trends appear to be a need for a universal platform that provides the ability to collaborate and aggregate as a means of growth and the ability to be present at the points of consumption to make it simple to complete the transaction and effect a sale.
The push to adopt digital technologies to create seamless and integrated experiences for customers comes from a need for the company to gain competitive advantage, keep up with trends in the world; and some from the innovative ideas thrown up by partners whose services help power the business- ideas that came up from the market itself.

On whether the current rate of digital adoption will change behavior

On the question of whether digital adoption as a result of current circumstances will actually change behavior, opinion seems to indicate behavior change as a result of digital adoption that deliver a competitive advantage or those that bring about exciting experiences will definitely happen however, whether behavior will change when it concerns aspects of human needs like pleasure/business travel, eating out, or whether or not people will refuse a great offer on physical office space only time will tell.
A case in point being Vietnam which is back to near pre-lockdown state of normal people movement, but is seeing little behavioral change in the way people congregate to satisfy their social needs or their needs for entertainment and pleasure.

Added to the thinking pot is the belief that technology itself will not change anything unless there is a change in people’s mindsets and way of working. Hence working on building a culture needs to be a simultaneous process – if not one that precedes- in the digital transformation activity. Due consideration needs to be given to social listening as a way to not just to understand what is being said, but also to understand the sentiments behind it, both for people management and customer management if digital transformation is to be successful.

On the question of what will change on the people management, workforce and ways of working front, and, what a reimagined workforce structure will look like

The current crisis is not the outcome of an economic shock but the result of virus that is virulent and contagious. The fact that there isn’t a fix for it now, nor does there appear to be one in the near future, and, that the only way to stay safe is through the measures currently in place has resulted in a reset button on how people interact and will impact how people engage and work in the future. Generally, in large corporates the leadership team are an age that makes them more vulnerable to the virus. However, workforce cuts across generations and ages and hence it is imperative to ask and answer questions, on:

  • Circumstances under which one will opt to either go to work or work from home;
  • Adjustments that one will make both to the workplace and the way one works
  • Circumstances under which one will opt to undertake work related air travel
  • How well is the workforce reconciled to a non-physical digital way of work
  • Dealing with the spouse’s concerns about the risk one puts oneself through

These questions were challenged as considering only the near term perspective. Using the example of Sweden’s handling of the pandemic it was suggested that the long term view should consider mindset change, human resilience, flexibility and adaptability in societal constructs rather than take a binary near term view to address the challenge thrown up by the pandemic.

On what it takes to adopt a changed way of working

The key to adopting a new way of working is an executive decision and a clearly articulated direction on when physical or digital interaction will be adopted. In the example here business activity was divided into 4 parts Coverage, Communication, Execution and Evaluation. The decision was to limit physical business interaction with the world on a need to basis. Digitalization adequately covered the aspects of Coverage and Communication but Execution and Evaluation has external dependencies which they have no control over hence only time will tell how those two parts of the business activity pans out. This pandemic has stopped people in their tracks and while they have found ways to move forward the unpredictability of the future means that ability to retrieve and recover ground becomes a part of the new normal.

Acknowledging that age is a factor due to which in most large corporates the senior most leaders are more vulnerable to the virus, safety and responsibility to self and organization will drive business leaders to adopt efficient and effective ways of engaging with work.
The role that a spouse’s concern will play in the decision to put oneself at risk – and consequently the family at risk – cannot be responded to in a simple way.

The response to the dangers of COVID needs to be put into context and managed realistically. Countries like India have gone into a shell when they can least afford to. A mindset change is required to emerge from the shadow of the virus and look at ways to continue working and doing business, because until a definite cure is discovered the virus is here to stay.

On a re-imagined workforce strategy and structure

Recent events have deepened comfort with tele commuting and reduced physical contact but it has also demonstrated that the need for social interactions in business can’t be ignored.
The current crisis has forced businesses take the virtual route, made them more comfortable crossing physical boundaries virtually, work around time zone differences and most importantly brought about appreciation for the flexibility to interact, learn, ideate, and problem solve, that digital offers. This will most likely pressure on businesses to reconsider budgets for physical travel and therefore impact the events and events related logistics sector necessitating the sector to reimagine its business model.

Keeping the new ways of working in view, organizations are beginning to re-imagine their workforce strategy and structures in ways that increase the possibilities of working with a lean core, sharing experts, using collaborative workforce structures that cut across adjacent business sectors – though not competitive businesses as yet. In this context mindset change therefore, is not simply about individuals challenging their mindset for reasons of survival but developing a mindset change that addresses the need for success, and, the need to achieve goals collectively.
Re-imagining workforce strategy and structure has a long way to go. The real re-imagined workforce structure will need a hardnosed view on workforce costs. Since the heaviest costs are loaded at the middle and senior management going forward workforce structures will need to be:

  • Re-evaluated at the level of regional structures and roles defined by output – essentially rationalizing costs by taking away those roles that are aggregators.
  • Driven by an assessment of the absolute number of people needed to deliver the core business blended with a contingent workforce at the managerial level

A harder output and results focused workforce restructuring will need to take place especially in the middle and small sector if they are to remain in business even in the short run.

In conclusion

Questions remain as to what will be the catalyst that will promote re-imagination in your organization – be it digital transformation or workforce strategy. As to what will take organizations forward to respond to uncertain futures in a resilient and agile way in order to survive the answers seem to lay in an organization’s ability to be:

  • Agile and the willingness to adopt new ways or working that meet the requirements of the situation;
  • Nimble, willing to seize opportunities and take the risk to grow
  • Embrace the present, prepare for different scenarios and adopt different ways of engaging with work and people

[Part 2] Surviving to thrive: A 6 Part series to emerge stronger after a crisis

May 22, 2020
Chandrasekhar Pingali

A Process to apply The RICAP Framework to build a resilient and thriving organization

In Part One of this series we shared a process to reduce some costs immediately and others permanently (without laying off people). In this blog, we share a framework we created based on our readings and observations about organizations that have lived through several economic downturns and have not just survived, but continue to thrive by simply applying certain principles intuitively. We have now codified these principles and developed The RICAP Framework for organisations to create a blueprint to resilience and execute.

The RICAP Framework and the process to create and implement a blueprint for business resilience

The RICAP Framework (©iCube Consortium April 2020) is an approach to embedding resilience into the very core of a company’s way of thinking and functioning. Central to the understanding of resilient organizations are 5 principles that influence the way an organization functions through the 5 pillars.

So how does this work?

We take a 5 step process approach to apply the 5 principles to the 5 pillars of the framework.

Step 1: Understand the 5 principles

Relationship: Connectedness built on mutuality, reliability and predictability.
Mutuality is about how two parties stand to gain when they agree to come together. Partnerships become predictable and reliable when they are built on strong foundations of aligning each other’s business purpose. 

Innovation: Creative use of resources to generate new or alternate solutions.
Whether it is people, infrastructure, machinery, real estate or other assets, how can you use these resources to create something new or figure out alternate solutions to solve a problem?

Collaboration: Sharing resources to generate efficiency.
Achieving collective results whether internal or external. The support that you provide other team/enterprise for them to succeed is the true essence of collaboration. 

Agility: Maintaining balance while adapting or responding to change with speed and flexibility.
Being nimble and alert to changing business environment, thinking through quickly to alter course that will continue to build the business is the essence of this principle. What should you do to review or reimagine your business & execute, playing to the core strengths of the enterprise?

Prudence: Relentless balancing between needs and wants.
This is a ruthless evaluation of what you really need for the business and what your wish list of wants could be. It is not just about reducing costs but also in assessing strategy, technology, people or structure. How will you distinguish between the two to eliminate inefficiency?

In general, no single principle is more important than others. However, in a given situation, one or two principles may take prominence over the others.

Step 2: Understand the stated definitions of the 5 pillars of a business

The pillars are Structure, People, Strategy, Process and Technology. Each of these are critical to run the business and are closely interrelated with each other. In other words, a cause and effect relationship exists between each of the pillars. For example if you add or reduce people, it will impact the Structure or the Process pillar.

Step 3: Assemble leadership team to study the 5×5 RICAP matrix and brainstorm

There are two ways of applying the 5×5 matrix. One way is to take one principle and review the matrix across 5 pillars. For example, take Prudence and review what it means across the 5 pillars of your business. The second way is to choose one pillar and review across all 5 principles. For example, choose Strategy and brainstorm how it pans out across the five principles.

Once in a year, at the point of goal setting for the new financial year, a review of all five pillars and five principles helps in sharpening the business goals. On the other hand, the matrix can also be used to review one pillar at a point in time, for the enterprise or its smaller units. The framework acts as a powerful tool with built-in statements that trigger ideation process. Teams will quickly get into the rhythm of brainstorming and it saves time and resources.

A full review takes up to 10-12 hours for quality discussions and outputs. If you don’t have time then prioritize the pillar to focus on, and apply the 5 principles for an action plan. 

Step 4: Create a blue print, build a consensus and finalize next steps

Once the brainstorming is done, create a roadmap for all five pillars. Prioritize and agree a set of actions with the top team. Agree on the resources needed, get a buy-in, finalize the roles and responsibilities and measures of success. The process will include clear plans to engage key influencers in the enterprise, allocate resources, detail the plan, form a program governance team, engage the larger organization, communicate and manage change, amongst other things.

Step 5: Execute the plan, ensure governance and conduct post implementation reviews

Sustained sponsorship of the program and adopting feedback with speed and agility is key to embedding the change. Conducting post implementation reviews on every major initiative will ensure continuous improvement and point out the mindset change needed in people, if required.

As research shows, any change is as good as the commitment of the leaders and the mindset change driven across the enterprise.

A note in conclusion

None of this is rocket science or fundamentally something new to experienced business leaders. However, our reason for creating The RICAP Framework is intended to bring together a structured approach and a process to continuously assess and build resilience in the organisations to thrive, not just survive!

Go ahead and Download the RICAP Framework Poster here

About Author

Chandrasekhar Pingali
Chandru is an entrepreneur and Founder & MD of iCube Consortium Pte. Ltd. He played a lead role in developing The Pentagon Model, Technology enabled HR diagnostics tools and the award winning e-market place SolveCubeHR that enables enterprises to find verified and matched freelance experts. Connect with him on LinkedIn

[Part 1] Surviving to thrive: A 6 Part series to emerge stronger after a crisis.

April 9, 2020
Chandrasekhar Pingali

A process to reduce some costs immediately and others permanently (without laying off people).

When you review your cost lines threadbare every month, you can eliminate at least 15% of wastage permanently. Yet, research reveals that only 15% of CEOs do so as a matter of routine!

With the COVID-19 crisis looming large, our company – an SME in Asia- recently reviewed our cost lines threadbare. We managed to temporarily park 22% of costs until normalcy returns; identified 28% that can be further reduced if the situation worsens; and as an added bonus, eliminated 15% of wastage permanently!

In Part 1 of this series, we share with you a step wise process to analyse the major cost lines typical for most enterprises. Viz. people; premises & infrastructure; technology; marketing & sales; travel; entertainment; and telecom.

Step 1
  • Engage leadership team to analyse all cost lines and discuss possible solutions  

Step 2 
  • Focus on cost drivers that represent 80-90% of costs to run the business. 
    1. Use company bank statements, credit card statements all accounting systems
    2. Examine auto debits in detail
    3. Look at payroll and benefits
    4. Examine cost patterns for the last 12 months 
  • Understand which costs are disproportionately growing compared to the revenue lines by business or product. 
    1. Analyse costs vs revenue trajectory 
    2. Ask the question “have the costs grown at the same pace as revenue? Are they higher or lower?” 
  • Review the costs of all support functions in greater depth
    1. Identify support cost silos that exist between businesses/products
    2. Ask the question “can they be hubbed?” 

Step 3
  • Identify immediate costs that can be saved from all of the above. Divide into: 
  1. Stop now 
  2. Stop permanently
  • Set cost reduction targets based on Severity of impact on business ratings – high, medium, low

Step 4
  • Sign off and Communicate the decisions across the team

Step 5 
  • Set up / change process of approvals across the company

Why it works…

In a business as usual scenario most CEOs believe some costs do not exist, or more accurately should not exist, because there are processes and people to manage them, but in reality they do. Here’s a list of typical expense cutting hotspots

  • Technology infrastructure:

Cloud storage, unused licences, storage of archived files, auto debits for tech solutions etc. It’s amazing how these costs can creep without us realizing it. Cut them off ruthlessly! If paid in another currency sometimes just the exchange rates are a big saving. 

  • Technology resources

Take a closer look at all outsourced services, resources from vendor partners, internal resources who can be redeployed for product development or improvements.

  • Telecommunication costs:

Hang on! Technology has actually brought a dramatic reduction in our personal telecom bills. So, have the company’s bills reduced too? Now is the time to cast a critical eye on the details in the bills! Watch out for Data plan creep, mobile usage reimbursements, use of direct calls vs internet calls; review the number of people who need to be given company mobiles.

  • Travel, stay and entertainment

This cost line could represent almost 30% of a company’s costs. They should be zero now during COVID. More importantly, rethink and prepare for new ways of working. Take advantage of the paradigm shift in work culture. Do you really have to travel to meet people or clients or events? Which ones are really essential? Do open up this expense tab and look at policy change for the future. There is potential for a more permanent reduction 

  • Premises

Consolidate premises costs

  1. Evaluate seat utilisation rate (normally ~1.3-1.5 per seat);
  2. Hand over premises not required based on potential new ways of working arrangements; 
  3. Explore the possibility of working in shifts permanently

  • Benefits: 

Many employee benefit policies do not get reviewed once activated.  Review the policies and ROI on benefits. By simply changing the nature of benefits, and withdrawing those that don’t provide any real benefit, it is possible to generate real savings without affecting employee morale. 

  • Marketing and sales

Often the least tampered with of all costs because of the fear of impact on revenue. But, a change in tactic may be more relevant for the moment, cost less and prepare you for the upturn. So, take a peep, don’t be shy, the possibilities may surprise you! 

  • People: 

Trust the assumption that in a downturn people would rather have the safety of a job, than be laid off. Besides, when you are back on the upturn you need to be prepared to go full steam ahead. Some best practices that we have observed in Asia are: 

  1. Stop promotions and increments for 6 months
  2. Reduce pay starting at the top with lower reductions at lower levels
  3. Consider paying 50% of salary for next few months and then ramp up after
  4. If you must lay off people, you still have to bear the costs of notice pay and redundancy. Agree to pay in installments every month. It helps in financial planning.

At a point of crisis all enterprises embark on a cost reconciliation exercise to survive.  However, every crisis changes the way work is done, what is relevant and important, and provides opportunity not merely to survive but thrive!

About Author

Chandrasekhar Pingali,
Chandrasekhar Pingali, Founder and MD of iCube Consortium Pte. Ltd, Singapore, is an established and well known HR and business leader.
iCube has a business advisory vertical and is the creator of SolveCubeHR – an award winning e-HR platform for all solutions HR.